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Kevin Roose recently covered the “contract-worker problem” – namely, the increasingly number of startups who have focused on keeping labor arm’s length as 1099 Contractors vs W2 Employees. And the IRS looking into whether this status is legitimate.

Because #ImOld, I remembered a similar situation years ago which had large implications for community-oriented online products who were relying upon “volunteers” to onboard new users, manage some traditional support functions, etc. A group of Ultima Online volunteers sued Origin/ElectronicArts, claiming they were really employees and owed back pay. That lawsuit hinged on questions around fixed schedules, training, performance monitoring and work similar to what other paid employees were doing at the company. The lawsuit had a chilling effect on other game companies (I was at Second Life at the time so paid attention as we launched a volunteer greeter role to interact with n00bs).

As Roose’s article notes, startups are also realizing that grinding your contractors down to minimum viable wages doesn’t necessarily attract and retain the best professionals. Homebrew companies such as Shyp have, from Day One, sought to create a great work environment for their contractors and part-timers. After all, in many cases these people are the ones who touch your customers.

“startups are also realizing that grinding your contractors down to minimum viable wages doesn’t necessarily attract and retain the best professionals. Homebrew companies such as Shyp have, from Day One, sought to create a great work environment for their contractors and part-timers. After all, in many cases these people are the ones who touch your customers” Ha… I genuinely can’t tell whether that allusion was deliberate or simply a subconscious byproduct of our conversation – but either way, I dig it 😉